Gen Z is having a harder time paying off their credit cards as inflation increases.
- Compared to a year ago, credit card balances for younger people increased by 30%, VantageScore data shows.
- Low credit score consumers also saw their credit card balance rise by almost 25%.
- Young people are starting to see the effects of inflation in their credit card bills.
Gen Z, or young people 25 and under, saw their credit card balance increase by 30% in the second quarter, compared to a year ago, according to credit score company VantageScore. The rest of the population saw an 11% rise in their credit card balance, per the report. VantageScore’s data comes from a random sample of 12.5 million credit files in the US.
People with low credit scores under 660 also saw a credit card balance increase by almost 25%, over double the percent for the rest of the population. For millennials, the data found that their credit card balances went up by 22% over the past year.
With inflation driving prices up for commodities like gas and food, young and low-income consumers are having a harder time paying off credit card and other bills than they were earlier in the pandemic.
During the pandemic, consumers had some cushion from stimulus checks, savings, and a pause on student loan repayments that helped them pay down their debt more, Silvio Tavares, CEO and president of VantageScore, told Insider.
VantageScore found that the percentage of credit card loans 30 days past due is still below where it was before the pandemic, but it’s increasing, especially for Gen Z and millennials.
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This article was originally posted on Business Insider on August 1, 2022.